Sometimes house buyers need to borrow additional money if they have to purchase a new house before finding a buyer for their old property. Loans designed for this purpose are known as bridging loans.

With a bridging loan, a large sum of money is borrowed for a relatively short period of time. Lenders appreciate that this money is usually needed quickly, so most bridging loans are completed within 24 hours.

Unfortunately, as the loans are required quickly, most borrowers do not have time to shop around. Lenders take advantage of this by charging high rates of interest as well as an administration fee of around 1% - 1.5% of the sum borrowed.

If you are fortunate, the sale of your old property will go through quickly and you will only require a bridging loan for a very short period. It is possible, however, that the sale of your old property will not go through, which may mean that you will have to sell your new home in order to repay the bridging loan.